Will the free market come to the rescue?
Any chance that customers are free to move between providers to ones who aren't restricting the service they are suppose to be providing?
It looks like Netflix has opened the floodgates with its Comcast deal to connect directly to its IP broadband network, and a queue of top-tier operators may have formed – with Verizon at the front. Which is why this week Netflix has confirmed that it has signed a deal to pay for direct access to Verizon’s broadband network, a …
I think that part of the problem is that there is no/very little free market for broadband in the U.S. Most people have to go with their local cable provider who then charges a lot and gives not very much and importantly has no incentive to make Netflix look good! I think we're a lot better off in this country.
There's an interesting question hanging in the air of what the cable providers will do once TV on demand becomes properly widespread (while on demand is no longer exclusively the domain of the early adopter, I don't see my parents or grandparents taking it up any time soon).
Right now, cable subscriptions provide a large, predictable and presumably high-margin slice of revenue. Especially compared to what on-demand costs. This is even true in the UK- NowTV gives you what you'd actually want from a Sky subscription, at a fraction of the cost and (so far) with no ads. Interestingly, it's done by Sky (presumably they're of the view that the service competes with piracy and Netflix/Amazon rather than cannibalising existing subscribers). In a rational universe, the vast majority of people with a decent broadband connection would be binning their dishes and £50 p.m. TV contracts for the cheaper service.
But if everyone does this, providers will have much less revenue to play with- and what they've got coming in now doesn't go into a Scrooge McDuck-style money bin. Weaning these organisations off the money fountain that Cable TV has been for the past few decades is going to be painful for them (even if the revenue lost is just being spent on inefficiencies right now). This looks like a motive for 1) throttling and 2) (when you can't throttle) replacing the revenue stream with a levy on Netflix.
I'm not condoning throttling (quite the opposite) but I can see why they'd want to do it.
Was catching up on GoT over the weekend. No Ads, but there are breaks in the program.
Short promo's for Sky Atlantic twice an episode, and also a (very) brief break to show the show's logo, much as you might get when returning from an ad break.
Much better than real advertising for sure, but on a service you are -directly- paying for, still pretty cheeky. No ads at all on Netflix, or Amazon's offering.
It wouldn't be a problem if they were really the rat-bastages everyone accuses them of being. Right now the problem for the cable companies is exactly the sort of tripe the net-neutrality types spout: there are a lot of channels they carry that nobody gives a damn about. My subscription has 150 channels, of which I regularly watch maybe 12 and touch at most 30 in a month. That's 120 channels to whom the cable company doesn't need to pay royalties on my behalf. But because they've already built the last mile, they've been coerced into supporting those channels because there is no "incremental cost and it's good for diversity." Screw the 120 channels! They could probably halve my cable bill it they provided a more minimal selectable set and increase their profits by 50%.
Means Peering so suggesting equality, not really that when Neflix, Comcast are so big is it? @ James that is what the EU regulation provides; any restrictions need to be in back and white and notified to the the consumer. Problem in the US is that there is so little Service provider competition in the USA. Time for the baby bells again?
Not sure why your two comments each got a downvote. I'm a USian and I don't live in one of the big metro areas (I'm a couple of hours west of Chicago.) I have little choice in ISPs, so with respect to your first comment, above, no, free market competition does not exist so no correction from the market. As for your comment about the US being a world leader in technology, I also think about stuff like this. Many reports over the last decade have shown how other countries have far surpassed us in Internet speeds and feeds. That is certainly not the only aspect of technological leadership but it sure gives the US a black eye. And it makes me sad and a little angry that I have a sucky Internet connection and I have big corporations that want to decide what I can and can't access over that sucky connection.
The baby bells were more government interference. What we need is less.
THERE ARE NO NATURAL MONOPOLIES. NOT EVEN THE LAST MILE TO THE HOUSE.
The monopolies are imposed by politicians who grant them to certain people/companies who fund their campaigns. And then get foolish rubes to vote for them so they can democratize the internet through regulation.
In the UK, every time a group of villagers and/or with the local council gets together and launches a local fast broadband programme, BT suddenly announce that the local exchange is getting an upgrade and the prices undercut what the locals can compete with.
I went into a Virgin Media shop and asked them if there were any plans, no matter how long term to expand their network the thirty miles it would take to reach my reasonably large town and the answer was it's never going to happen. They are content to milk existing infrastructure and aren't investing in any more.
If existing companies can raise the barriers to enter the market so high they effectively become monopolies even if they aren’t legally entrenched ones.
I applaud that Netflix has decided to do what is best for their customers. (maybe not if they raise their rates to cover it) But cable companies charging for access to Netflix and charging Netflix for traffic on their network is like the gas company deciding to impose a tarrif if I cook on a certain brand of stove or the my electricity provider charging me more if I use GE light bulbs. Disgusting greed. I often think the FCC does more harm than good, but indeed this would be a good place for them to show some might.
Yes, it's an abused cliché but this really could be the thin end of the wedge.
If there is no real competition and you have to pay to get a quality connection to your customers all the big firms will have to start paying the ISP to compete. How long before you get whizzy Bing results and tortoise slow Google results due to artificial throttling.
It will end up as an extortion racket, as more large firms with big traffic pay for the higher speed connections and all the other sites get slower and slower. Next you get a phone call from Commizon&T telling you that for a 'small' fee your customers can enjoy a lovely high speed link to your site, one that your competitor doesn't have (shame if it got even slower after all!)
Every ISP will want a piece of that pie and we might end up with a two tier (or even multi-tier) web.
Netflix's Open Connect CDN is not free. Data center space has very real costs.
Netflix went through this with Comcast as well. There's an excellent article on that here:
Just about all of it applies to Netflix and Verizon as well.
I found this paragraph enlightening:
You will notice that when Netflix was using third party CDN providers Akamai, Level 3 and Limelight for 100% of their video delivery, there were no quality issues. Just look at their speed ratings from 2012. The reason for this is that those CDNs already have their servers connected to ISPs like Comcast and have put in place all the necessary links, both free and paid, to guarantee, via an SLA, that they can deliver Netflix’s video. So for all the people who say that Comcast forced Netflix into paying or is strong arming them, that is not true. Netflix has multiple options in the market for delivering good quality video, but Netflix chose to build their own CDN and change their delivery strategy because they want to have more control over it and save money.
And these bits:
This is very different from what Netflix was getting from Cogent because Comcast is providing fully dedicated capacity, unlike sending it through someone like Cogent where those connections are potentially over-subscribed if a transit provider over-sells their capacity, which Cogent has a history of doing.
To date, Cogent has had peering disputes with AOL, Teleglobe, France Telecom, Level 3, TeliaSonera, Sprint-Nextel and Verizon. I find it interesting no one in the press mentioned how Cogent always seems to be the one major transit provider who continues to have disputes with so many other network providers, year after year.
"So in effect these deals are a slap in the face of net neutrality sup-porters, but at the same time Netflix needs to deliver quality video, in particular to customers who have top end pay TV services, otherwise its outputs would compare badly."
I don't live in the U.S. and as a result I actually pay more than a U.S. based customer due to currency conversions. Yet, a lot of the content is geolocked and I cannot see the majority of new releases as a result. In effect, I pay more for less and it is doubtful this will change soon. Quite ironic that in a country dedicated to free speech, net neutrality fails to address this concern of locking people from content based on their location.
opinions over why Netflix 'had to pay' for better access are just that: opinions. applying some thought and logic to why things work on the network produces a much more reasonable answer: the guys who run internet links don't like it when one app from one network sucks down a large percentage of their transit bandwith. it's poor design to have all that crap compete for relatively scarce bandwidth at the peering and transit points into a network, esp when you consider the average network has 50-100x more bandwidth inside than it has to the outside world. it's called over subscription. and it's how ISPs and telcos have made money since day one. so of course, buying bandwidth just for your app, at a speed that makes sense for your load is going to improve your performance, instead of going through a congested, over subscribed and MANAGED public uplink. of course that link has bandwidth rate limiters on it. it would be foolish not to. when only 20 customers can potentially generate 100mb/s of traffic, if you don't put some limits on it, it becomes unusable.
which is why net neutrality, the way some folks talk about it, is foolish in the extreme. some pundits talk about it as if it's been the de facto status of internet,when it never has, I built my first ISP infrastructure in 1992/1993. filters and firewalls were the first things we out in to keep our stuff protected from roaming eyes, and we would have loved rate limiters, because links back then were relatively slow and fantastically expensive. the hardware companies gave us app based rate limiting, so we could keep the network running.
netflix chooses to believe that running 100 dump trucks an hour worth of concrete through a neighborhood on a public road shouldn't cost them anything, because they paid for the trucks. the folks who own the roads are telling them that ain't gonna happen. are we really going to put on our tinfoil hats and claim there is a vast conspiracy by the road owners to 'hold up' netflix for what amounts to abusing the network for their own gain? I love netflix, I've been a subscriber for years, but I also know there is no such thing as a free lunch, and I also know that unless you are going to being genuine two way value to a network, no cost peering isn't in your future. the folks who take care of the networks 'get,' this. clearly Netflix does as well, even if they are going to grumble, bitch and moan about it, as well as try to get laws imposed on everyone that favor their type of company, to the detriment of everyone else.
be glad they are being treated like every other carrier. last look at traffic flows, netflix is 1/3 of all traffic flowing around the US. and whineyness of how much the US sucks for broadband, there are more people that use Internet daily in the us than the entire population of some countries, the metro areas of the USs 10 largest cities would make up a good portion of the geography of others...
also consider, those stats about how much the us sucks at internet are really thrown off by just how big it is. even with 312 million citizens, the country is over half empty. think about what that means for infrastructure costs vs a 'large' country with bad ass internet for everyone... that has the total population of 2 or 3 of the USs major cities. honestly, every person that throws that crap out there must have failed statistics.
The problem here is that monopoly ISPs in the US rarely deliver their promised "peak" speeds, and there is no guarantee or legislation around performance or oversubscription. So you take an already overcrowded Internet pipe, and let everyone share it fairly, unless they pay extra for peering or cacheing. Now what incentive do you have to grow the Internet pipe anymore?
With Netflix's horrible precedent setting, and the FCC's gutting of net neutrality, no one is addressing the issue in terms of real performance and guarantees to the subscriber!